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What's driving the new economy?: the benefits of workplace innovation

  • Sandra E. Black
  • Lisa M. Lynch

This paper argues that changes in workplace organization, including the usage of self-managed teams, incentive pay, and employee voice, have been a significant component of the turnaround in productivity growth in the United States during the 1990s. Our work goes beyond measuring the impact of computers on productivity and finds that these types of workplace innovation appear to explain a large part of the movement in multi-factor productivity in the United States over the period 1993-1996. These results suggest additional dimensions to the recent productivity growth in the US that may well have implications for productivity growth potential in Europe.

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Paper provided by Federal Reserve Bank of San Francisco in its series Working Paper Series with number 2003-23.

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Date of creation: 2003
Date of revision:
Publication status: Published in The Economic Journal, vol. 114, pp. F97-F116 (February 2004)
Handle: RePEc:fip:fedfwp:2003-23
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  11. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
  12. Richard B. Freeman & Edward P. Lazear, 1995. "An Economic Analysis of Works Councils," NBER Chapters, in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52 National Bureau of Economic Research, Inc.
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  20. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
  21. Stefano Scarpetta & Andrea Bassanini & Dirk Pilat & Paul Schreyer, 2000. "Economic Growth in the OECD Area: Recent Trends at the Aggregate and Sectoral Level," OECD Economics Department Working Papers 248, OECD Publishing.
  22. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-67, May.
  23. Peter Cappelli & David Neumark, 2001. "Do “High-Performance†Work Practices Improve Establishment-Level Outcomes?," ILR Review, Cornell University, ILR School, vol. 54(4), pages 737-775, July.
  24. Brynjolfsson, Erik. & Hitt, Lorin M., 1993. "New Evidence on the returns of information systems," Working papers 162. Working paper (Sloan, Massachusetts Institute of Technology (MIT), Sloan School of Management.
  25. Casey Ichniowski, 1990. "Human Resource Management Systems and the Performance of U.S. Manufacturing Businesses," NBER Working Papers 3449, National Bureau of Economic Research, Inc.
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  1. Socio-Economics of Innovation

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